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Gurkhas: Pensions

Volume 497: debated on Tuesday 13 October 2009

To ask the Secretary of State for Defence whether he plans to amend the terms and conditions of the Gurkha pension scheme; and if he will make a statement. (289998)

The Ministry of Defence has no reason, or plans, to amend the terms of the Gurkha Pension Scheme (GPS), which is now a closed scheme. New entrants to the Army join Armed Forces Pension Scheme (AFPS) 2005. The MOD will continue to operate the present GPS for those 25,000 members in the scheme.

The GPS was designed for retirement in Nepal and provides an income that equates to a good working wage there. Gurkhas who served as members of the GPS were able to retire on an immediate pension after only 15 years service, at an age as young as 33 years. They may therefore receive benefits under the scheme for many years while still of working age. The early age from which Gurkhas take their pension compared with their British counterparts means that over a lifetime most Gurkhas will receive equivalent or better pension value than those in AFPS 75.

The value of the GPS pension has been maintained over time through annual uplifts for inflation in Nepal and by reference to the Indian Central Pay Commission 10-yearly reports. Gurkha pension rates are maintained at levels that are at least double the rates of the Indian Army pension scheme.

Gurkha soldiers today serve on the same terms and conditions of service as the wider Army. Gurkhas who served on or after 1 July 1997 have also been given the option to transfer to the AFPS and many have chosen to do so. Service on or after 1 July 1997 was given a year-for-year value, while service before 1 July 1997 was converted using an actuarial factor to give broadly equivalent pension value in AFPS for that period. This is normal practice across the public sector for those transferring between pension schemes.